Business
Nearing 80, she can no longer afford to own Arcadia’s Book Rack — or live in California
“Welcome to the Book Rack,” Karen Kropp says, her eyes panning the increasingly sparse shelves inside her bookstore.
“It used to be a lot fuller.”
After 40 years — the last half under Kropp’s ownership — the beloved used-book store tucked between a hot pot restaurant and a chiropractor’s office in Arcadia is closing this week.
Slowed down by the consumer shift to online shopping and further decimated by cratering sales during the pandemic, the shop held on by a thread in the months since Kropp cashed out her life insurance policy to keep it afloat.
Karen Kropp pauses among the increasing empty shelves at the Book Rack, a bookstore she has owned for nearly two decades.
(Dania Maxwell / Los Angeles Times)
“The miracle is coming,” Kropp often assured herself. “When you’re in a bookstore, you have to be a dreamer.”
But the miracle never came, and Kropp, who turns 79 later this year, knew that even if she couldn’t really afford to, it was time to retire.
She plans to live off her monthly Social Security check — around $1,200 after insurance premiums are deducted — and can’t afford to stay in Southern California. Instead, she will move in with her younger sister in Albuquerque once she finishes clearing out the shop.
“When you’re in a bookstore, you have to be a dreamer.”
— Book Rack owner Karen Kropp
“I put everything I had into this place,” she said. “Everything.”
Kropp’s situation mirrors those of many aging small-business owners who, unless they have a relative eager to take over, are faced with complex questions about their legacy and finances.
In January, the owner of Vroman’s, a historic independent bookstore in Pasadena, announced on Instagram that, as his 80th birthday approached, he planned to retire and sell the shop to someone outside his family.
“This was not an easy decision for me,” he wrote, adding that the store had been under his family’s stewardship for more than a century.
The owner of Vroman’s Bookstore in Pasadena recently announced that he plans to retire and sell the shop to someone outside his family.
(Myung J. Chun / Los Angeles Times)
Retirement in the U.S. is a patchwork system with “a really big gaping hole” for self-employed people such as Kropp, who never worked for a large employer that offered 401(k) matching contributions, said Nari Rhee, director of the Retirement Security Program at the UC Berkeley Labor Center.
Someone in Kropp’s situation — a single renter living in L.A. County — needs $2,915 a month to cover their basic necessities, Rhee said, citing a figure calculated using the Elder Index, a tool developed by the University of Massachusetts Boston to measure how much older Americans need to cover basic living expenses.
“That is basically twice the average Social Security benefit in California,” Rhee said, noting that, in recent years, more older Californians have fallen into poverty and aged into homelessness.
“It’s a crisis.”
Almost 30 years ago, soon after moving west from Green Bay, Wis., Kropp got a job at the Book Rack, then on Baldwin Avenue, a short drive from the current location.
She started as a clerk, earning around $3 an hour to price and organize books, and adored her boss, Pat Carlson, the shop’s original owner. For someone whose main childhood gripe with the library was that it limited how many books she could check out at once, it felt like a dream that someone paid her to bond with customers over a love of books. (Her favorite is “The Great Gatsby.”)
“Readers are different,” she said. “They’re thinkers.”
The shop eventually moved to the current location and, after Carlson died, the owner’s husband offered to sell it to Kropp, then 60. She purchased it in 2006 for around $100,000, pulling from her savings, as well as some from her daughter and a sum she inherited after her father’s death to cover the down payment.
“It’s been a joy,” she said of owning the store.
Karen Kropp hands a customer their books at the Book Rack.
(Dania Maxwell / Los Angeles Times)
They were often busy in the early years, and she hired local high school students to help run the shop, although she manned it alone most of the time, working 10-hour shifts. They often did more than $10,000 in sales per month back then, but things slowed as customers adjusted to the click-and-receive-in-48-hours model of the Amazon era.
“Everybody wants it now,” she said. “And I can’t do that.”
In the months before the pandemic, Kropp considered selling the shop and moving closer to her children, grandchildren and five great-grandchildren, but she decided to hold on a bit longer.
Then, during the shutdowns, sales dropped to almost zero. Bills still came due, as did the shop’s rent and the fee for a storage unit where she kept overflow books, which together cost about $2,000 a month.
Karen Kropp rings up a customer at the Book Rack during a liquidation sale before the shop closes.
(Dania Maxwell / Los Angeles Times)
Sales eventually crept back up but never fully recovered; now, she said, it sometimes takes two days before sales hit $200.
After the hardest times, a bright spark always followed — a busy week, a special interaction between customers. After one such spark in late 2022, she cashed out her $50,000 life insurance policy, receiving only $5,000 even though she’d paid $18,000 into it.
She put the payout toward bills, rent and payroll. For the first time in 20 years, her passion started to feel like a job. She realized that she had left no part of herself for herself — every spare second and thought had gone into the shop.
It was time.
On a recent morning, Kropp sat behind the counter, next to a gift basket with peanut M&Ms dropped off by a customer and stacks of books she planned to donate if they didn’t sell by the official closing date, Feb. 28. (She has a personal policy: No book ends up in the trash unless it’s moldy or there’s evidence an animal has been living inside.)
A man steadying himself with a cane walked through the door and she greeted him.
“Boy, I’m sorry to hear you guys are leaving,” he said.
“Yes,” she said, nodding.
As was often the case, books triggered memories and he began to tell her about how, in his 20s, he traveled California in a camper van reading novels by the mystery writer John D. MacDonald. He was looking for one of his books called “The Long Lavender Look.”
Kropp nodded and her friend Peter Tran, who sometimes volunteers at the shop, took off toward the back of the store, quickly locating a yellowing copy. With the liquidation sale discount, the customer paid $1.10 for the paperback.
A longtime customer, whose artwork used to line the walls of the Book Rack, gave Kropp a painting of the storefront.
(Dania Maxwell / Los Angeles Times)
Danielle Rosaria Nahas, a customer who lives down the street, walked in with her daughter. An artist, Nahas was carrying a painting of the storefront she had made for Kropp.
“Thank you, sweetie,” Kropp said, her emerald eyes dampening with tears. “This is beautiful.”
Nahas had written the family’s address on the back of the wood frame.
“So if you ever miss us,” she said, “you could write to us.”
Nahas doesn’t have family in the area, she said, and her children had come to think of Kropp as a grandma. Her family created a home library with books from the shop during the pandemic and Kropp, she said, had always made her and her daughter, Amy Rose, 8, who has autism, feel so welcome.
The little girl sprinted toward the children’s section, twirling.
“Books, books, read,” she said aloud.
A few minutes later, a woman arrived with a list of several titles. She was putting together an auction item with a T-shirt that said “I’m with the banned,” as well as some commonly banned books.
Karen Kropp reaches for a book for a customer at the Book Rack.
(Dania Maxwell / Los Angeles Times)
Kropp squinted at the list, noticing it didn’t include authors’ names, which is how the store is organized. She closed her eyes for a moment, conjuring a name.
“Oh, Cisneros!” she said to herself, as she walked to snag a copy of “The House on Mango Street.”
“My brain has always been my computer,” she said.
After the customer left, the shop got quiet and Kropp and Tran reminisced. Then they got quiet too.
“The end of the chapter,” he said softly.
“But,” Kropp said, smiling, “it was a long chapter.”
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
Business
Orange County real estate investor pleads not guilty in $100 million bank fraud case
An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.
Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.
He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.
Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.
Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.
A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.
Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.
In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Prosecutors sought to hold Makhijani without bail after his arrest.
The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.
The request was denied and he was granted $500,000 bail.
However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.
The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.
Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.
The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.
Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
Business
Many indie festival films struggle to get distribution. Alamo Drafthouse is trying to change that
Dine-in movie theater chain Alamo Drafthouse Cinema is launching a new initiative to show unreleased independent films that had successful festival runs, a move that comes as specialty films have struggled to gain distribution.
The Alamo Exclusives program, announced Wednesday, will give limited theatrical runs to films that showed at festivals including Sundance, the Toronto International Film Festival, Tribeca Festival and South by Southwest festival, as well as Alamo’s own Fantastic Fest.
The idea is to help showcase films that received critical acclaim, but did not secure distribution or acquisition deals. The chain will not acquire these films, but instead will enter into agreements with filmmakers to exhibit their films on Alamo Drafthouse screens. By showing these films to audiences on the big screen, these films could get the momentum they need for further opportunities.
The program’s first film will be the documentary “Butthole Surfers: The Hole Truth and Nothing Butt,” which debuted last year at South by Southwest and chronicles the history of the punk rock band.
The film will be shown in Alamo Drafthouse theaters for a limited time later this summer.
The Austin-based chain, which is owned by Sony Pictures, has a long history of curating indie films for its audiences, giving Alamo Drafthouse confidence that its viewers want to see these kinds of movies, company chief executive Michael Kustermann said in a statement.
“Time and again, they’ve shown they’ll come out to support bold, original films when given the opportunity,” he said. The new Alamo Exclusives “gives us another way to champion filmmaker-driven films that deserve to be discovered and connect them with the wider Alamo Drafthouse audience.”
The initiative comes at a difficult time for indie films. Since the pandemic upended the movie business, traditional studios and distributors have had less appetite for risk, including betting on smaller indie films out of festivals.
And as the 2023 dual writers’ and actors’ strikes thinned out theatrical lineups, that aversion to uncertainty became a push for reliable and profitable hits.
“Too many incredible films premiere at festivals and then never receive the theatrical life they deserve,” Lisa Dreyer, director of Fantastic Fest and film innovation at Alamo, said in a statement. “We are actively searching for films across all genres, from horror to comedy, to everything in-between, to champion in this new, exciting way.”
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